Olympics help UK Payrolls to Surge

U.K. jobless claims unexpectedly fell and payrolls rose to a record high as the London Olympics helped boost hiring.

Jobless-benefit claims fell 4,000 to 1.57 million in September, the Office for National Statistics said today in London. The number of people in work surged 212,000 to 29.6 million in the quarter through August, the highest since records began in 1971. Separately, minutes of the Bank of England’s policy meeting this month showed that officials are divided on the need for more stimulus for the economy.

The labor-market strength provides a boost for Prime Minister David Cameron and deepens what the Bank of England describes as a “productivity puzzle” as the economy continues to create jobs despite Britain’s return to recession at the end of last year. That may deepen divisions among Bank of England policy makers assessing the outlook for inflation and growth.

“Yet another strong set of labor-market figures, which on one hand is encouraging, but on the other makes the so-called productivity puzzle even more baffling,” said Nida Ali, an economist at the Ernst & Young ITEM Club in London. “It’s likely that there will be some form of payback in the months ahead.”

Economists had forecast no change to September jobless claims, according to the median of 27 estimates in a Bloomberg News survey. The decline in claims was the third consecutive drop and it left the claimant-count rate at 4.8 percent. The June-August jobless rate measured by International Labor Organization methods declined to 7.9 percent, the lowest in more than a year, from 8.1 percent.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell